BEFORE THE

OFFICE OF THE SECRETARY

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

_____________________________________

)

Application of )

)

FRONTIER AIRLINES, INC. ) Docket DOT-OST-2011-0214

)

for an exemption under 49 U.S.C. § 40109 )

)

Chicago (O’Hare), Illinois – )

Cancun, Puerto Vallarta, and San Jose del )

Cabo, Mexico )

_____________________________________ )

ANSWER OF AIRTRAN AIRWAYS, INC. 

Communications with respect to this document should be sent to:

Bob Jordan Robert W. Kneisley

 President Associate General Counsel

AIRTRAN AIRWAYS, INC. Leslie C. Abbott

9955 AirTran Boulevard Senior Attorney

Orlando, FL 32827 SOUTHWEST AIRLINES CO.

 1901 L Street, N.W., Suite 640

Washington, D.C. 20036 

 bob.kneisley@wnco.com

(202) 263-6284

December 6, 2011
2

BEFORE THE

OFFICE OF THE SECRETARY

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

_____________________________________

)

Application of )

)

FRONTIER AIRLINES, INC. ) Docket DOT-OST-2011-0214

)

for an exemption under 49 U.S.C. § 40109 )

)

Chicago (O’Hare), Illinois – )

Cancun, Puerto Vallarta, and San Jose del )

Cabo, Mexico )

_____________________________________ )

ANSWER OF AIRTRAN AIRWAYS, INC. 

On November 21, 2011, Frontier Airlines, Inc. (Frontier) applied for an exemption 

and related designations under 49 U.S.C. § 40109 authorizing it to engage in scheduled 

foreign air transportation between Chicago O’Hare Airport (ORD) and Cancun (CUN), 

Puerto Vallarta (PVR) and San Jose del Cabo (SJD), Mexico. AirTran Airways, Inc. 

(AirTran) opposes the grant of Frontier’s application with respect to Chicago (ORD) -

Cancun, and today has filed a competing application for exemption authority to provide 

service between Chicago Midway Airport (MDW) and Cancun. AirTran has no objection 

to Frontier’s application for Chicago – PVR/SJD authority. 

Currently three U.S. carriers are designated under the U.S.-Mexico bilateral 

agreement to provide scheduled service between Chicago and Cancun, all from ORD: 

American Airlines, United Airlines, and USA3000. USA3000 is purported to be ceasing 

service soon, possibly as early as January 2012. The termination of USA3000’s service 
3

would leave one U.S. carrier designation available in the Chicago – Cancun market. 

Accordingly, AirTran is filing its application for Chicago – Cancun authority in 

anticipation of the near-term availability of the third designation. For the reasons 

discussed below, it is clear that awarding the Chicago -- Cancun authority to AirTran will 

provide far greater public benefits than the service proposed by Frontier. Accordingly, 

AirTran urges the Department to grant its application for Chicago – Cancun exemption 

authority at issue here as soon as possible. 

I. AIRTRAN/SOUTHWEST HAS A MASSIVE PRESENCE AT 

CHICAGO TO SUPPORT CANCUN SERVICE, WHILE FRONTIER 

HAS ALMOST NONE.

AirTran is a wholly owned subsidiary of Southwest Airlines Co. (Southwest), as 

Southwest closed its acquisition of AirTran on May 2, 2011. Since then the two 

companies have worked steadily toward a full integration of their operations and 

schedules. In fact, Southwest and AirTran anticipate receiving a Single Operating 

Certificate (SOC) from the Federal Aviation Administration by the end of first quarter 

2012. For the purposes of the present proceeding, therefore, the two companies should

essentially be considered as one since they will be operating as a single combined 

carrier during most of the period in question.

1

 And, as a combined carrier, 

AirTran/Southwest has a massive presence at Chicago that will strongly support new 

service to Cancun, compared to Frontier’s tiny operation at Chicago with no support for 

ORD –CUN service. 

With an average of 220 daily departures at Chicago MDW, the combined 

AirTran/Southwest is the second largest carrier in the region, accounting for 28% of all 

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 1 Frontier itself has recognized this. See Docket FAA-2010-0109 (US/DL Slot Swap), Comments of Frontier Airlines, 

Inc., p.23, August 29, 2011, “Thus, for all relevant intents and purposes, Southwest and AirTran are a single carrier 

and should be treated as one for the purposes of the slot reallocation process.” 
4

Chicago domestic O&D passengers (Exhibit FL-101). In fact, AirTran/Southwest 

originate 41 times as much domestic traffic in Chicago as Frontier (Exhibit FL-102), and 

operate over 65 times as much capacity in Chicago as Frontier (Exhibit FL-103).

AirTran/Southwest operate nonstop service between Chicago and a total of 58 cities, 

many of which will generate significant feed traffic and provide convenient online 

connections for Chicago – Cancun travelers (Exhibit FL-104). 

In comparison, Frontier has a miniscule presence in Chicago, operating only a 

single route from MDW to DEN that carries less than one percent of Chicago traffic

(Exhibits FL-101 and 105). Moreover, while Frontier proposes to provide service from 

ORD to Cancun, it currently has no service at ORD. Thus, Frontier has no connections 

and no feed at ORD to support its proposed ORD – CUN service. Because Frontier has 

no meaningful presence at Chicago, no existing base of Chicago customers, and no 

feed support for ORD service, it would provide virtually no public benefits beyond the 

local Cancun market. AirTran/Southwest, on the other hand, with its huge network at 

Chicago Midway connecting to dozens of cities, will unquestionably be able to generate 

large amounts of traffic to support MDW - Cancun service as well as to leverage this 

valuable U.S. authority to the benefit of a large number of communities beyond

Chicago. 

II. AIRTRAN WOULD PROVIDE THE ONLY CANCUN SERVICE

FROM MDW, GENERATING FAR MORE PUBLIC BENEFITS 

THAN REDUNDANT SERVICE AT ORD. 

The best use of the one presumptively available Chicago – Cancun designation 

is for the Department to authorize new AirTran low-fare competition and service from 

Chicago Midway Airport. Midway serves the entire Chicago market but is particularly 
5

convenient to south side residents. MDW has no nonstop service to Cancun, while 

ORD currently has daily, year-round service to Cancun from both American and United 

(as well as USA3000 for the present). Therefore, awarding one of the three U.S. 

designations to AirTran at MDW would create a geographical diversity of service that 

now does not exist and would clearly benefit the region. 

Beyond this, at ORD Frontier would be competing against established network 

service by mega-carriers United and American with no passenger feed and very little 

name recognition, raising doubts whether it would have the staying power to succeed in 

this market. AirTran/Southwest, on the other hand, will undoubtedly be able to provide 

strong, long-term competition in the Chicago-Cancun market supported by its enormous 

base of operations at MDW. 

III. UNLIKE FRONTIER, AIRTRAN WILL PROVIDE DAILY, YEARROUND SERVICE TO CANCUN.

AirTran explicitly proposes in its application to provide year-round daily service

between MDW and CUN. In contrast, Frontier’s application states only that it will 

operate service between Chicago and Cancun “up to seven times per week,” which 

clearly suggests that its service will be less than daily for at least part of the year. 

Frontier Appl., ¶ 4. In addition, while Frontier’s application states that it plans to provide 

service on a “year-round” basis, Frontier has operated almost all of its current Cancun 

services on a seasonal (less than year-round) basis. For example, Frontier operates 

seasonal service in the IND-CUN and SLC-CUN markets (October through April), MKECUN (December to April), and MCI-CUN (October to August). Frontier also provided 

seasonal service in the STL-CUN market until it was discontinued completely earlier this 
6

year.

2 The only year-round Cancun service Frontier offers is from its Denver hub. In 

Denver, however, Frontier operates 142 daily departures to 59 nonstop cities,3 as 

compared to zero daily departures at ORD. 

In sum, Frontier’s history raises serious doubts about both its ability and 

commitment to provide the year-round service that its current application promises. In 

contrast, AirTran/Southwest’s commitment to provide daily, year-round service in this 

market, supported by strong local passenger traffic and a multiplicity of beyond market 

connections, is unquestionable. 

IV. THE U.S. DOES NOT NEED TO, AND SHOULD NOT, WASTE A 

VALUABLE DESIGNATION TO ACCOMMODATE FRONTIER’S 

PROPOSAL FOR APPLE VACATIONS

Frontier’s proposal is premised on an agreement to carry Apple Vacation’s bulk 

traffic to Mexico. Apple functions as a tour operator and therefore buys its airline seats 

in bulk, typically for most if not the entire capacity of the plane. Until now, Apple has 

acquired its lift in the ORD-CUN market from USA3000 (a wholly owned subsidiary of 

Apple), which is purportedly exiting the market in early 2012. Frontier states in its 

application that by agreement with Apple it will essentially replace USA3000 in this 

market. Frontier Appl., ¶¶ 2 and 3. In fact, it appears from the Frontier application that it 

may take over the leased A320 aircraft of USA3000 as part of the deal.4

Frontier’s application appears to presume that the Department should simply 

accept its private deal with Apple by designating Frontier for Chicago – Cancun service

and allowing Frontier to step into the shoes of USA3000. But the choice of airlines in 

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 2 Official Airline Guide (OAG) as of December 3, 2011, January 2011-June 2012 schedules. 3 OAG for the week ending November 14, 2011.

4 Frontier’s Application states that it would utilize A320s with seat capacity ranging from 162 to 168. According to 

company websites, Frontier’s A320s have 162 seats and USA3000’s A320s have 168 seats. 
7

limited designation markets is a matter of the public interest, and should not be 

subservient to privately-negotiated arrangements. Accordingly, the Department should 

reject Frontier’s presumption, and instead award the authority to the carrier that will 

provide the greatest public benefits. In this case the choice is clear. As shown above, 

there is no question that AirTran/Southwest will provide far greater public benefits in the 

MDW -- CUN market than Frontier in the ORD – CUN market.5 

But beyond this, a resolution is available to the Department that would enable 

both AirTran/Southwest and Frontier to participate in the Chicago – Cancun market. To 

summarize the salient points:

• Frontier has no current service or market presence at ORD which is 

an essential prerequisite for developing individually ticketed traffic. 

• Frontier has only one route to Chicago, but it is at MDW and 

provides no feed value for a new “scheduled” ORD route. 

• Frontier’s proposal is dependent largely, if not exclusively, on 

providing lift to Apple Vacations. 

Since Frontier has no existing service at O’Hare and an extremely limited 

presence in Chicago, Frontier can provide service to Apple Vacation’s customers 

equally as well under the charter provisions of the U.S.-Mexico bilateral agreement. 

See U.S. - Mexico Air Transport Agreement (Agreement), as amended, Annex II: 

Charter Services. Charter services (including combination and all-cargo services) 

between the United States and Mexico are provided for under the Agreement, and there 

are no bilateral limitations on such services. Therefore, there is no need for the 

Department to waste limited-entry scheduled authority on Frontier’s proposal. Rather,

we urge the Department to award AirTran exemption authority to provide scheduled

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 5 An additional reason for questioning the long-term viability of Frontier’s proposal is its nearly exclusive dependency 

on providing lift to Apple Vacations, since Apple contracts are usually for a defined period of time. 
8

service between Chicago MDW and Cancun while at the same time allowing Frontier to 

support the Apple program via the liberal charter authority that is available under the 

bilateral. This is a proverbial “win-win” solution that would allow the Department to 

make the best possible use of scarce U.S. scheduled service designations while also 

permitting Frontier to serve the market on a charter basis from ORD. 

CONCLUSION

For the reasons given above, we urge the Department to deny Frontier’s 

application for ORD – Cancun exemption authority, to grant AirTran’s application for 

MDW – Cancun exemption authority, and to designate AirTran for such service under 

the U.S.-Mexico Agreement. 

Respectfully submitted,

____________________

Robert W. Kneisley

December 6, 2011

AirTran/Southwest Carries The Second Largest 

Number of O&D Passengers In Chicago 

Note: Frontier includes Midwest and Frontier data and United includes Continental. 

Source: U.S. DOT O&D Survey data. 

Domestic O&D Passenger Share 

Exhibit FL-101 

29%

28%

26%

16%

1%

0%

5%

10%

15%

20%

25%

30%

UA FL/WN AA Other F9
AirTran/Southwest Carries Over 41 Times More 

Originating Passengers Than Frontier From Chicago 

5,448,234

131,821

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

41 Times 

Chicago Originating O&D Passengers 

Note: Frontier includes Midwest and Frontier data. 

Source: DOT, Origin-Destination Passenger Survey, YE Q2 2011. 

Exhibit FL-102 

AirTran/Southwest Frontier 
208,160

2,994

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

110,000

120,000

130,000

140,000

150,000

160,000

170,000

180,000

190,000

200,000

210,000

69 Times 

Note: Frontier includes Midwest and Frontier data. 

Source: DOT, Origin-Destination Passenger Survey, YE Q2 2011. 

Exhibit FL-103 

AirTran/Southwest Frontier 

AirTran/Southwest Operates Over 65 Times As Much 

Capacity As Frontier In Chicago 

Weekly Seat Departures 
IADIADIADIAD

LGA LGA LGA

EWR EWR EWR

ISP ISP ISP ISP

PHL PHL PHL

PVD PVD PVD

MHT MHT MHT

SRQ SRQ SRQ

TPA TPA TPA

SAT SAT SAT SAT

ONT ONT ONT

SNA SNA SNA

LAX LAX LAX

SAN SAN SAN

SFO SFO SFO

OAK OAK OAK

SJC SJC SJC

SMF SMF SMF

RNO RNO RNO

PDX PDX PDX

SEA SEA SEA

MSP MSP MSP

MDW

CUN CUN

ATL ATL ATL ATL

BKG BKG BKG

MCO MCO MCO

RSW

ABQ ABQ ABQ

ALB ALB ALB

AUS AUS AUS

BDL BDL BDL

BHM BHM BHM

BNA BNA BNA

BOS BOS BOS

BUF BUF BUF

BWI BWI BWI

CHS CHS CHS

CLE CLE CLE

DEN DEN DEN CMH CMH CMH

DTW

FLL FLL FLL

GSP GSP GSP

HOU HOU HOU

IND IND IND IND

JAN JAN JAN JAN

LAS LAS LAS LAS

LIT LIT LIT LIT

MCI MCI MCI MCI

MSY MSY MSY

OMA OMA OMA

ORF ORF ORF

PHX PHX PHX

PIT PIT PIT PIT

RDU RDU RDU

SDF SDF SDF

SLC SLC SLC

STL STL STL STL

TUS TUS TUS

AirTran/Southwest Already Has A Major Presence in Chicago 

That Would Support Its Proposed MDW-CUN Service 

Current AirTran/Southwest Markets 

 Proposed AirTran Market 

Current AirTran/Southwest MDW Service 

Destinations 58 

Weekly Departures 1,540 

Weekly Seat Departures 208,160 

Source: OAG schedule for the week of November 14, 2011. 

Exhibit FL-104 
ORD ORD

MDW

CUN CUN

DEN DEN DEN

Frontier Operates Only One Route At Chicago Midway 

And Has No Feed Support For O’Hare Service 

Current Frontier Market 

 Proposed Frontier Market 

Current Frontier MDW Capacity 

Destinations 1 

Weekly Departures 23 

Weekly Seat Departures 2,994 

Source: OAG schedule for the week of November 14, 2011. 

Exhibit FL-105